Madras High Court
A. Stephen Samuel, Proprietor, ... vs The Union Of India (Uoi) Represented By ... on 28 April, 2003
Equivalent citations: III(2003)BC469, [2004]118COMPCAS82(MAD), 2003(3)CTC95, (2003)2MLJ220
Author: R. Jayasimha Babu
Bench: R. Jayasimha Babu
JUDGMENT N.V. Balasubramanian, J.
1. These two Writ Appeals are filed under Clause 15 of Letters Patent against the common order passed by the learned Single Judge in W.P. Nos. 19700/2000 and 20725/2000 dated 23.7.2001.
2. The appellants are the tenants of the properties covered in the notice issued by the second respondent. According to the appellants, the properties were let out to them by one P.V. Paulson Ukkuru and the said P.V. Paulson Ukkuru is the sole proprietor of M/s. Josephaul Steels to which the third respondent, namely, Canara Bank, Chennai had extended certain credit facilities which were collaterally secured by the deposit of title deeds. Since P.V. Paulson Ukkuru did not repay the loan borrowed by him, the third respondent filed the suit for recovery of the outstanding amount and on the formation of the Debts Recovery Tribunal, the said suit was transferred to the file of Debts Recovery Tribunal, Chennai and it is stated that an order was passed by the Debts Recovery Tribunal directing the said Paulson Ukkuru to repay the same. Since he failed to repay the amount as ordered, the Debts Recovery Tribunal has directed the issuance of recovery certificate. It is stated that in the execution of the recovery certificate the properties which are under occupation of the appellants/tenants were sold in public auction and the fourth respondent herein was the successful bidder. The purchaser of the properties requested the Recovery Officer, the second respondent herein, for vacant possession of the properties and the second respondent passed an order directing the appellants who are in occupation of the properties to hand over the vacant possession of the properties and in the order it is stated that if they fail to hand over the vacant possession of the properties to the second respondent, suitable action would be taken for their eviction.
3. The appellants challenged the said order in the writ petitions filed by them before this Court and the learned Single Judge, who heard the writ petitions, dismissed the same giving liberty to the appellants to move the appellate authority under the Recovery of Debts due to Banks and Financial Institutions Act, 1963 (hereinafter referred to as 'Recovery of Debts Act'). Learned Judge while directing the appellants to approach the appellate authority, also held that the Recovery Officer is authorised under the Recovery of Debts Act to evict any person from any property sold in public auction and the contention of the appellants that they are statutory tenants and they could not be evicted has no force. However, learned Single Judge safeguarded the interest of the appellants by observing that the appellate authority should decide the appeal to be preferred by the appellants herein on merits and in accordance with law, uninfluenced by the observations made in his order. It is, against the orders passed by the learned Single Judge in the two writ petitions, the present writ appeals have been preferred.
4. We heard learned counsel for the appellants and learned counsel for the respondents. The Recovery Officer has issued the order to both the appellants directing them to vacate and hand over vacant possession of the properties in their possession on pain of forceful eviction in exercise of the powers conferred in Rules 39 and 40 of the Income-tax (Certificate Proceedings) Rules, 1962 read with section 29 of the Recovery of Debts Act. Section 29 of the Recovery of Debts Act, which occurs in Chapter V of the Act relating to the recovery of debt determined by Tribunal, provides that the provisions of the Second and Third Schedules to the Income-tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962, as far as possible, shall apply with necessary modifications as if the said provisions and the rules referred to the amount of debt due under the Recovery of Debt Act instead of tax under the Income-tax Act. Rule 39 of the Income-tax (Certificate Proceedings) Rules, 1962 (hereinafter referred to as 'the ITCP Rules') deals with the delivery of immovable property in occupation of defaulter or of some person on his behalf or of some person claiming under a title created by the defaulter subsequent to the attachment of the property. Rule 40 deals with delivery of immovable property in occupation of tenant, and the said rule reads as under:-
"Whether the immovable property sold is in the occupancy of a tenant or other person entitled to occupy the same and a certificate in respect thereof has been granted under rule 65 of the principal rules, the Tax Recovery Officer shall, on the application of the purchaser, order delivery to be made by affixing a copy of the certificate of sale in some conspicuous place on the property, and proclaiming to the occupant by beat of drum or other customary mode, at some convenient place, that the interest of the defaulter has been transferred to the purchaser".
Rule 41 deals with the application to be preferred by the purchaser of the immovable property when there is resistance or obstruction in obtaining possession of immovable property. Rule 42 deals with the resistance or obstruction by the defaulter or by some other person at his instigation. Rule 43 deals with the power of the Tax Recovery Officer when there is resistance or obstruction by bona fide claimant. Under rule 43, where the Recovery Officer is satisfied that the resistance or obstruction was occasioned by any person other than the defaulter claiming in good faith to be in possession of the property on his own account or on account of some person other than the defaulter, the Tax Recovery Officer shall make an order dismissing the application. Rule 44 deals with the dispossession by purchaser and that rule provides that where any person other than the defaulter is dispossessed of immovable property sold in execution of a certificate by the purchaser, he is empowered to file an application before the Tax Recovery Officer complaining of such dispossession and the Tax Recovery Officer is required to investigate into the matter. Rule 45 provides that where the Tax Recovery Officer is satisfied that the applicant was in possession of the property on his own account or on account of some person other than the defaulter, he shall direct that the applicant to be put into possession of the property. Rule 47 deals with the right to file a suit by a person other than the defaulter to establish the right which he claims to be in possession of the property in question.
5. It is, in the light of the above said Rules, the validity of the order passed by the Recovery Officer has to be seen. There is no doubt that the appellants are tenants under the defaulter. It is relevant to mention here that the appellants have deposited the arrears of rent except a small amount and the counsel for the appellants have undertaken that the appellants would clear the entire arrears of rent.
6. We find that the Rules framed under the ITCP Rules largely correspond to the relevant Rules occurring under Order 21 of the Code of civil Procedure relating to the execution of a decree. Rule 39 of the ITCP Rules corresponds to Order 21 Rule 95 C.P.C. which deals with the delivery of possession in occupancy of judgment debtor and Rule 40 of the ITCP Rules corresponds to Order 21 Rule 96 C.P.C. We are of the view that Rule 40 of the ITCP Rules dealing with the case where the property is in occupation of the tenant or other person entitled to occupy the same in his own right contemplates only symbolical possession to the auction purchaser and the tenants cannot be evicted by the Recovery Officer by issuing an order directing them to vacate the properties forfeiting their rights under the relevant provisions of the Rent Control Law.
7. The Supreme Court in BRAHMDEO CHAUDHARY v. RISHIKESH PRASAD JAISWAL held that it should not be insisted that possession be delivered first and the objector may later on move the court under Order 21 Rule 99, C.P.C. The Supreme Court in the above case held as under:-
" Under Rule 35 of Order 21 CPC a warrant for possession can be straight-away sought against persons occupying immovable property which is the subject matter of decree by the decree holder provided such persons who are occupying the suit property are judgment debtors or persons claiming through the former. Once resistance is offered by a purported stranger to the decree and which comes to be noted by the executing court as well as by the decree holder the remedy available to the decree holder against such an obstructionist is only under Order 21, Rule 97, sub-rule (1)and he cannot bypass such obstruction and insist on reissuance of warrant for possession under Order 21, Rule 35 with the help of police force, as that course would amount to bypassing and circumventing the procedure laid down under Order 21, Rule 97 in connection with removal of obstruction of purported strangers to the decree. Once such an obstruction is on the record of the executing court the executing court cannot tell such obstructionist that he must first lose possession and then only his remedy is to move an application under Order 21, Rule 99 CPC and pray for restoration of possession."
The Supreme Court in Tanzeem-E-Sufia v. Bibi Haliman and Ors. (2003-2-L.W.16) has reiterated the above view.
8. The Delhi High Court in TARA CHAND v. GANGA RAM held that if the property is in possession of the judgment debtor or some person on his behalf, the auction purchaser would be entitled to actual possession under Rule 95, and if it is in the possession of tenants or other person entitled to occupy the same, the purchaser would be only entitled to symbolical possession under Rule 96. The reason for granting symbolical possession, according to the Delhi High Court, is that if the tenanted property is sold, the purchaser would be purchasing the right, title and interest of the judgment debtor and he would become the landlord and it is for him to take proceedings to evict the tenant in occupation of the property in accordance with law. The same view was reiterated by a later Division Bench of the Delhi High Court in M/s. PURAN CHAND & CO. v. M/s. GANESHI LAL TARA CHAND wherein it was held that where the property is in possession of a tenant, the auction purchaser would be entitled to symbolical possession of the property in terms of Order 21 Rule 96 C.P.C.
9. The appellants herein are not defaulters to the bank. They do not claim to be in occupation of the properties under a title created by the judgment debtor subsequent to the attachment of the properties by the Recovery Officer, nor do they claim that they entered into possession subsequent to the Recovery Certificate issued by the Recovery Officer. There is no doubt that the appellants are the lawful tenants of the defaulter to the bank even before the initiation of the proceedings by the Bank against the defaulter. Therefore, when the property was in the occupation of tenants at the time when it was sold, the auction purchaser would be entitled to symbolical possession of such property, but he would not be entitled to claim that the tenants should be directed to hand over actual possession of the respective portions of the property in their possession. In our view, it is impermissible for the auction purchaser to get actual possession of the property by throwing the tenants out of the property. The auction purchaser, in our view, will be entitled to possession in accordance with Rule 40 of ITCP Rules and the delivery contemplated in the Rule is not actual delivery, but symbolical delivery of the property to the auction purchaser.
10. It is also relevant to notice that the Recovery Officer has not followed the procedure prescribed in Rules 41 to 45 of ITCP Rules. The Recovery Officer without holding an enquiry and without hearing the appellants who are the tenants, has straight away passed the order directing the tenants to vacate and hand over possession of the properties in their possession. It is also curious to note that he relied upon both the Rules 39 and 40 of ITCP Rules which cover two different situations and it shows that he has not applied his mind to the question whether the appellants are in occupation of the properties on the basis of the right created by the defaulter subsequent to the attachment or whether the appellants are in possession of the property in their own right.
11. Consequently, we hold that the order of the Recovery Officer is not sustainable in law and is liable to be set aside. Though learned Single Judge directed the appellants to avail the alternative remedy by way of appeal, since the Recovery Officer, Debts Recovery Tribunal lacks jurisdiction in ordering actual possession of the property and the order suffers from mistake apparent on the face of the record, the order passed by the Recovery Officer is not sustainable in law. Accordingly, the order of the Recovery Officer is quashed. Consequently, the common order of the learned Single Judge made in both the writ petitions is set aside. The writ appeals stand allowed. No costs. Connected applications are closed.